Oracle to buy Sun Microsystems for $7.4bn

Oracle to buy Sun Microsystems for $7.4bn

Just weeks after takeover talks with IBM collapsed, Sun Microsystems has agreed a surprise $7.4 billion cash deal to be acquired by Oracle.

Under the definitive agreement, Oracle will pay $9.50 a share for Sun, a 42% premium on Friday's closing price, valuing the deal at around $5.6 billion net of Sun's cash and debt.

Oracle expects the acquisition to add over $1.5 billion to non-GAAP operating profit in the first year, increasing to over $2 billion in the second year.

The deal means Oracle acquires Sun's Java and Solaris software. The firm says Java is the "most important software Oracle has ever acquired".

Oracle Fusion Middleware is built on top of Sun's Java language and software and the firm says it can now ensure continued innovation and investment in the technology.

Larry Ellison, CEO, Oracle, says: "The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems."

Ellison says the acquisition means Oracle "will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves".

Scott McNealy, chairman, Sun, adds: "Oracle and Sun have been industry pioneers and close partners for more than 20 years. This combination is a natural evolution of our relationship and will be an industry-defining event."

The deal has been unanimously approved by the Sun board and is expected to close this summer, subject to stockholder and regulatory approval.

Comments: (1)

A Finextra member
A Finextra member 20 April, 2009, 22:38Be the first to give this comment the thumbs up 0 likes

Wow! The world may never be the same again.

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